Evergrande receives much-needed $500 million cash infusion from the Middle East

There's a plot twist today in the Evergrande New Energy Vehicle Group (Evergrande NEV) saga, and for the first time in quite a while, it's good news. The company has announced that it's received a $500 million investment from a Middle Eastern investor called NWTN Inc., based in Dubai, the United Arab Emirates (UAE).

NWTN is a green energy company focused on providing high-end EV products and green energy solutions, according to Evergrande's statement. NWTN is the first new energy company from the UAE to be listed in the US, and it has a complete vehicle assembly plant in Abu Dhabi. The investment was sorely needed and will help address the challenges Evergrande NEV has been going through.

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Back in July, it announced that it had a loss of about $3.8 billion in 2022. That was still, amazingly, only half of the loss it managed in 2021.

NWTN says it will receive a 27.5% stake in the Chinese EV company in return for its cash, as well as the right to nominate a majority of the board. This means Evergrande NEV is valued at about $1.82 billion in the deal, which is expected to close in the fourth quarter of this year (October to December).

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Evergrande NEV was founded in 2019 and its first production vehicle, the Hengchi 5, started mass production in September 2022, with the first deliveries commencing in October. Then, in December, the company announced it was laying off 10% of its workforce, and those who stayed were facing salary cuts. Fast forward a few months to April of this year and production was put on hold due to a lack of funds.

In a similar fashion, the development of the next two models, called Hengchi 6 and Hengchi 7, was put on hold, but now that money has been secured, the development will move forward for these, including winter and summer testing, and eventually mass production.

Via